Macroeconomics

QUESTION 18 (a) Suppose the aggregate production function for an economy is given by: Y = K1/4N3/4 , Where Y is output, K is the capital stock and N is the number of workers. (i) What are the returns to scale and returns to each factor implied by this production mction? (2 marks) (ii) Derive the relationship between output per worker and capital per worker for the above production function. (1 mark) (b) Discuss the two sources of growth implied by the Solow growth model. (2 marks) (c) Is convergence of levels of output per capita a worldwide phenomenon? Discuss. (2 marks) ((1) Discuss two problems associated with using GDP per capita to compare living standards across countries. (2 marks)